Public Bill Committee

[Mr. Joe Benton in the Chair]
LPGI 06 NHS Confederation
LPGI 07 Local Government Association

Alistair Burt: On a point of order, Mr. Benton. I have looked carefully at the amendment paper, but I can find neither an amendment nor a new clause tabled by the Government in relation to the limitation of their powers to direct, which was a central part of our previous discussions in Committee leading up to the debate on clause 2. It is a vital part of the Bill and I am extremely surprised that, after all the promises and offers to limit the power, nothing has been tabled to deal with it. Will the Minister consider our adjourning until such an amendment is tabled, so that we can debate the matter and get on with the job?

Joe Benton: Strictly speaking, that is not a point of order for me. It is something for the Opposition to sort out with the Government.

Clause 1 ordered to stand part of the Bill.

Clause 2

Invitations and directions for proposals for single tier of local government

Andrew Stunell: I beg to move amendment No. 92, in clause 2, page 2, line 5, after ‘invite’, insert ‘on or before 31st March 2007’.
I am delighted to be opening the batting after the swift passing of clause 1. First, to respond briefly to the point of order raised by the hon. Member for North-East Bedfordshire, let me say that most of the debate on clause 2 centres on three fundamental queries about the Government’s proposals. The first relates to the time—the Minister referred to “the window” when he gave evidence to the Committee. The second relates to geography and which councils can or cannot produce proposals and what limitations there should be; and the third relates to the power of direction to which the hon. Gentleman referred. Amendment No. 92 relates to the time; no doubt, there will be opportunities for discussions on geography and the powers of direction on a separate occasion.
We can see from the number of the amendment that it was tabled after several other amendments, which in some ways are more central to the concerns that have been expressed, had been tabled. However, the trick of parliamentary selection means that amendment No. 92 comes. It gives us the opportunity to look at the process that the Government are launching under clause 2, its limitations and what amendments might be necessary.
The Liberal Democrats do not seek to stop the process. It is right that there should be an opportunity for local government to take a look how it organises itself and, when there is clear consent, for it to be enabled to make changes to be more efficient, more effective and, most important, more representative of local communities and better able to deliver what they need. I must declare a personal historical interest in the sense that I do not have an axe to grind, having served on a lower-tier authority, an upper-tier authority and a unitary authority in my time. I have seen pluses and minuses to each of those types and I do not come with any baggage about what should happen next. We therefore welcome the intention behind clause 2. The purpose of the amendment is certainly not to derail the clause or thwart that intention.
As the Minister has said, it is absolutely right that there should be a window. There is no doubt that the actual process of considering such matters is a painful one for local authorities of all sorts and often takes their eye off the ball of providing services and representing their local communities. I would not mind betting that with, one or two exceptions—we heard from the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) on Second Reading—there is a pronounced lack of engagement in the process by the local communities concerned. It is very much an insider’s issue—I might even venture to say that it is an anorak’s issue. The time that an executive spends on a proposal cannot be spent on issues more fundamental to the communities that local government serves.
We think that the process should be permitted, and we agree with the Minister that there should be a limited window of opportunity but, bearing that in mind, we are surprised that that view is not incorporated the Bill. That brings us to amendment No. 92, which proposes that the Secretary of State only be able to extend an invitation on or before 31 March 2007. The Minister would be right to say that that is in the Bill; however, what is not stated on the face of the Bill is when the Secretary of State will lose that right to extend an invitation. The wording of the amendment is such that we will support the Opposition amendments in another group to remove the power of direction.
 We believe that there should be a power of invitation and we are happy that clause 2 will permit the Secretary of State to exercise such a right, but the power should be limited in time. The purpose of amendment No. 92 is to limit the time in which the Secretary of State can extend an invitation to 31 March this year. In other words, the power of invitation would lapse at the end of this financial year and would not be available to him or his successor in primary legislation next year, or in five years, or 10. A Secretary of State would have to return to the House and explain that circumstances had changed such that there should be another opportunity for local councils to make proposals.
The limitation in time is necessary for the protection of local government and local communities, and in particular so that the disruption and confusion, and the diversion of resources and effort that the process of coming together to make a bid involves, can be avoided. I hope that the Government will accept the amendment in the spirit in which it was tabled, and to hear what the Minister meant when he said:
“We are working on parliamentary counsel instruction to have a power of direction that is defined in both geography and time to the satisfaction of the LGA.”——[Official Report, Local Government and Public Involvement in Health Public Bill Committee, 1 February 2007; c. 87.]
The Minister is still waiting for parliamentary counsel, so we thought we would do him a favour and save him some hefty fees by tabling an amendment about time. I am looking forward to hearing what he has to say to this simple and straightforward amendment, which has a clear purpose and which matches exactly his own intentions.

Phil Woolas: I think it is right to say that, although we have had sittings in the other room, it now feels as though we are back in more familiar territory. I look forward to serving under you, Mr. Benton, and under Mr. Chope. I wish to put on record my thanks to the Committee for the sensible way in which the evidence session was approached. The Government found it useful, if at some times awkward, but that is the purpose of the new Committee procedures. I also note that the tone of consensus lasted approximately two and a half seconds before the hon. Member for North-East Bedfordshire reverted to his role of opposing the Government by raising a point of order. I was pleased that you commented on that, Mr. Benton.
Let me try to explain what the Government are trying to do, because the hon. Member for Hazel Grove has made a reasonable point about the time, geography and powers. I will also try to expand upon the point made by the hon. Member for North-East Bedfordshire, even though it was not a point of order. Three groups of amendments are coming up on that point, so perhaps in the round we shall see the outcome.
Both the Secretary of State and I have made clear on several occasions our view that restructuring should be off the table after the current window of opportunity. That was my right hon. Friend’s commitment to local councils and Parliament. I am therefore happy to reassure the Committee that we have no plans to launch a further round of reorganisation following consideration of the Bill. On the face of it, amendment No. 92 would do no more than make an absolute reality of that assurance. It would perhaps be reasonable of him to expect me just to accept the amendment, but there is a good reason why I shall have to disappoint him. None the less, but the intent of his amendment is accepted.
We believe that we need to retain the ability to invite councils to make proposals for structural change, not because we as the Government want such change in itself, but because in certain circumstances councils might want and need a structural change to make sense of a boundary change. Clauses 8 to 10 provide a mechanism for changes to be made to local authorities’ boundaries. As members of the Committee are aware, there are certain places where local authority boundaries are no longer sensible—for example, where the pattern of development around towns or urban areas means that boundaries are simply out of date and where some change would result in boundaries that better reflect community identities and provide a more sensible basis for the effective and cost-efficient delivery of local services.
Following her statement on the White Paper, my right hon. Friend the Secretary of State said in response to a question from my hon. Friend the Member for Leicester, South that she recognised that the option of a boundary review should always be available for dealing with too tightly drawn boundaries of urban areas. However, without the continuing ability to make structural change, that option would not always be available. Let me explain and give some reassurance. That issue would be before us were it not for the debate that has been prompted by the amendment.
The provisions in clause 8 to 10, to which I have already referred, allow the independent boundary committee for England to recommend a boundary change following a review. However, without safeguards, a simple power to make boundary changes could also enable structural change to be made by the back door. For example, the boundary of a unitary authority could be altered to such an extent that it swallowed entirely a neighbouring two-tier district. That would not be right. We firmly believe that structural change should be a bottom-up process, built on the proposals that authorities themselves make. That is why clause 8 contains safeguards that ensure that structural change cannot be made by the back door. Those safeguards take the form of restrictionson the kind of recommendation that the boundary committee can make. In particular, they preventthe committee from recommending expanding the boundaries of a unitary council to the extent that the residual neighbouring two-tier area was no longer viable and hence should be abolished.

Andrew Stunell: I thank the Minister for givingway and I appreciate his thorough briefing on clauses 8 and 9. However, those clauses refer to a process that is triggered. Clause 8 (1) says:
The Boundary Committee may, either on its own initiative or at the request of the Secretary of State or a local authority, conduct a review”.
That is entirely different in concept and outcome than the proposal in clause 2 (1) that
“The Secretary of State may invite or direct any principal authority to make one of the following proposals”.
We are not proposing an amendment to clause 8 or 9, although those clauses will no doubt be discussed in due course. We are proposing something that goes to the heart of the Secretary of State’s power to invite, and indeed the Minister’s and the Minister’s successors’ power to invite. I have not done the homework on how many Local Government Ministers there have been in the past 10 years, but they come and go. I should like the Minister to address clause 2, not clause 8.

Phil Woolas: To say that the number of recent local government Ministers is related to the clause might be stretching things. There have been three, with a longer  tenure so far than chief executives of local councils—a point that I shall be making at the SOLACE dinner that I am attending this evening, before swiftly leaving to return to the House. After that remark, however, I am not sure how my own tenure will affect the average.
The hon. Gentleman’s point is sensible. Irrespective of the present debate, however, the Government’s intentions remain the same. If a boundary committee makes a recommendation to the Secretary of State, the Secretary of State has three options under the current legislation: to reject it, to accept it, or to modify it—but the definition of the word “modify” is such that it is not possible to change the substance of the recommendation; any such change could be challenged. In plain English, that means that if the a boundary committee recommended that a boundary be moved to take into account, say, a housing estate or a school building, the Secretary of State could make a modification in relation to such small matters, but could not do so in relation to substantial matters. In particular, the viability of the neighbouring area—in practice it would most likely be a district but it could also be a metropolitan or a unitary authority—could not be threatened.
I ask the Committee to be patient, because the jigsaw puzzle will become clear as we continue, and I believe that I will be able to answer the hon. Gentleman’s point.

Robert Syms: The building blocks for the new structures are the existing districts or counties. There could also be cross-boundary structures. The Minister’s remarks about the boundary committee probably refer to existing unitary authorities, such as Leicester or Poole, expanding their boundaries if those boundaries are too tightly drawn. Presumably, therefore, the Minister wants to leave in the Bill the ability to annex adjoining areas.

Phil Woolas: I am wary of the word “annex”; I do not think that Bournemouth would annex Poole in any circumstances. Some people in Bournemouth might like to, to get hold of the—I will go no further.
 Let me briefly explain the Government’s policy. The process that I am describing in response to comments of the mover of the amendment, the hon. Member for Hazel Grove, is designed to retain the ability of the Government and local authorities to allow for slight changes—tinkering with boundaries—through the independent boundary committee process. The process of the invitation to propose a change to unitary status, however, makes it clear that that will be on the basis of existing boundaries. Invitations to bid are based on the possibility of abolishing boundaries if, for example, two or three districts join together or if there is a county unitary proposal, but not on proposals to move boundaries, although a number of authorities asked whether the latter might be possible under the process. The issues are related, but the processes are separate. It is because we are proposing the replacement of legislation that I am making these caveats, but if the Committee bears with me I think that I can answer the point.
We recognise that there might be circumstances in which redrawing a unitary area boundary might be right for that area even though it cast doubt on the viability of the residual neighbouring two-tier area. In such circumstances, the sensible option might be to provide that the remaining area should be abolished and merged with either a neighbouring unitary or a two-tier area. In such a situation we would want to be able to invite the authorities to say what they thought should happen and make proposals for change.Hence, we would need to issue an invitation under clause 2—the process that is underway—but that option would not be available if the amendment were made.
In summary, we have no plans for a further round of restructuring, but, as I say, there may be circumstances in future where a limited structural change is necessary to enable a sensible boundary change. In such circumstances, we need the power of invitation under clause 2 to allow that change.

Tom Levitt: I am grateful to my hon. Friend for making it clear that another wholesale round of structural change—indeed, another window for invitations—is not intended. He has now said that on the record and can be quoted. That statement will be welcomed, particularly in Derbyshire, where there is a two-tier system, which we believe works and can work even better. All the district councils in the county have agreements to make it work better. Does he agree that that process is healthy and indicates the healthy environment in which the debate about restructuring has gone on over the last few months, in contrast to the enforced but failed move to unitary status under the Banham procedure that the previous Government attempted several years ago?

Phil Woolas: I thank my hon. Friend for his intervention. Our discussions with Derbyshire county council and the districts within Derby show that two-tier working has improved, that services have got better and that the council tax payer is the beneficiary. I should make it clear that when the Government talk about the status quo not being an option for two-tier areas, that does not relate to the structural relationships, but to our wish to see movement towards even better working together. Our pledge is to remove legal and other obstacles to two-tier working where they can be identified. I hope that we will, in a later sitting, get the opportunity to explain the pathfinder projects in more detail.
I do not want to detain the Committee with discussions about the Banham process, but its fundamental problem was that it linked boundary movement with boundary abolition, so the procedure took a long time. As I tried to explain in the evidence session, that is a serious, worrying prospect for local councils, trade unions and the recipients of services.
I hope that I have persuaded the Committee that the limited procedure set out in the clause is required, not as a procedure for restructuring, but as a sensible procedure for boundary changes, which is in current legislation. I ask the hon. Member for Hazel Grove to withdraw his amendment, which is unnecessary.

Andrew Stunell: I thank the Minister for an elegant explanation, some of which made sense and some of which was more elegant than sensible. It is good to hear that he has no further territorial ambitions in Europe. That is great.
Our problem is that, in building in a power that can be exercised long after the Minister has become, presumably, the occupant of No. 10 and then moved on to some yet higher sphere, his successor will be able to exercise the power as they see fit and not necessarily with the same motives in mind as the current Minister. Although I understand his point about clauses 8 and 9, he has tempted me to table some amendments to those. He obviously envisages a process of growth and expansion of urban areas, taking out neighbouring district councils and perhaps making them unviable, resulting in further reorganisation being needed. Although that would no doubt be popular in some areas, I am quite sure that it would be controversial in others.
I should perhaps say to the Committee that my own constituency of Hazel Grove is in Greater Manchester and is neatly jammed in the corner between Derbyshire and Cheshire. Those of us with long memories will remember Poynton’s long fight to stay in Cheshire; it was successful and was therefore not incorporated into my own borough of Stockport. The hon. Member for High Peak intervened; there are certainly covetous eyes cast on part of his constituency in New Mills in Derbyshire—[Interruption.] Did the hon. Gentleman say I could have it?

Tom Levitt: No, I said “Hands off!”

Andrew Stunell: I am well aware of the issue that the hon. Gentleman described. Perhaps from what I might call the point of view of personal territorial aggrandisement, I should be thoroughly in favour of what he is saying. If I could take Poynton and New Mills, that might be good news for me.
We should be very careful in giving Ministers an enduring power to meddle in these matters. It would be far better to have a provision whereby, if subsequent change is needed, there is a requirement to come back to Parliament. Therefore, much as I enjoyed the Minister’s reasoning, I am going to ask that we test it in a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 12.

Question accordingly negatived.

Alistair Burt: I beg to move amendment No. 1, in clause 2, page 2, line 5, leave out ‘or direct’.

Joe Benton: With this it will be convenient to discuss the following amendments: No. 2, in clause 2, page 2, line 37, leave out ‘or direction’.
No. 3, in clause 2, page 2, line 40, leave out from ‘invited’ to the end of line 41.
No. 26, in clause 3, page 3, line 2, leave out subsection (1).
No. 27, in clause 3, page 3, line 5, leave out subsection (2).
No. 5, in clause 3, page 3, line 12, leave out from ‘2’ to ‘an’ in line 13.
No. 29, in clause 3, page 3, line 17, leave out ‘or directions’.
No. 6, in clause 3, page 3, line 18, leave out ‘or direction’.
No. 7, in clause 3, page 3, line 19, leave out
‘or comply with the direction’.
No. 8, in clause 3, page 3, line 20, leave out ‘or direction’.
No. 9, in clause 3, page 3, line 22, leave out ‘or direction’.
No. 10, in clause 3, page 3, line 24, leave out ‘or direction’.
No. 11, in clause 4, page 3, line 27, leave out ‘or directions’.

Alistair Burt: I echo the comments made both by the hon. Member for Hazel Grove and the Minister in welcoming you, Mr. Benton, to the more familiar surroundings of Committee progress in Committee Room 12. Having safely got a vote under our belt, we already feel that we are in much more familiar territory, including a hostile intervention from the hon. Member for High Peak. Therefore, we feel like we are up and running, and that is a great start to this phase of the Committee.
I would like to begin the discussion on this set of major amendments by referring back to the point of order that I raised earlier. This is a central part of the Bill. A certain amount of our discussion of amendment No. 92 concerned what is left on the face of the Bill in an attempt to understand what effect the Government are looking for. Our central concern is that the Bill provides the Government with significant, unlimited power to make directions to local authorities to merge and change shape, and effectively to redraw the local government map of England and Wales.
The fact that that power to direct was not mentioned in the White Paper—everything was to be by invitation only—came as a surprise to the local government world when the Bill was published.

Robert Syms: A shock.

Alistair Burt: As my hon. Friend says from a sedentary position, it came as a shock. Ever since then, in a series of statements, the Government have backtracked to a degree and suggested that the power would be limited in some manner. We have now had a great deal of time to see evidence of that, however, and we have not seen it. The evidence that the Committee, the House and, ultimately, the public will be able to trust is what is written in the Bill, not good intentions. I should mention two or three reasons to back up our concerns and to show why we feel so strongly that the reassurances and explanations for the power of direction that have been given are not enough. The power of direction ought to be removed altogether.
Why are we suspicious of this process and the Government? We cannot disregard the way in which we have got to where we are: the work done on the White Paper to build up the pressure to go for unitaries. Most hon. Members are aware of a lengthy process conducted by Ministers, who approached not the elected politicians in local authorities, but the senior officers, to explain the plans for restructuring local government. That process was entirely designed to encourage progress towards unitary government. It would have been far better if the Government had said that that is what they wanted to do. However, they went to authorities, building up hopes and expectations, saying that, if the authority covered a small area, that was just about the right size for a unitary authority and, if there were many hundreds of thousands of people more in a borough, that too would be the right size for a unitary authority. The former Secretary of State was skilful in delivering a series of expectations and hopes to senior officers in local government, all of whom—not just some—stood to benefit through the reorganisation process and could be relied on to sell the process to their politicians.

Roberta Blackman-Woods: From my experience in Durham, I do not recognise the process that the hon. Gentleman is outlining. We had a referendum some time ago in which local people said that they wanted a unitary county. A lot of the pressure came from local people: because of the confusion experienced in some two-tier areas, they were not sure which council did what and were convinced by arguments for the greater efficiency of unitary status. There is not necessarily a top-down approach everywhere; certainly not in Durham.

Alistair Burt: I am grateful for those observations. I bow to the hon. Lady’s superior knowledge of her own area, which has had the benefit of a public referendum to give effect to the wishes of the people. It is almost unique in that regard. There are not many authorities in those circumstances. If her officers were not sweet-talked by the Department, they missed out on an interesting part of the process. In plenty of other areas, local authorities and Members of Parliament can testify that, in the early stages of the process, the Department talked to officers to convince them about the process long before it got to elected members. That softening-up process was designed to produce a certain amount of pressure and encourage certain areas to consider the possibility of unitary authority status.
We have heard from a number of witnesses and hon. Members and we know about the disruption caused by local government reorganisation. My party certainly understands that; the Conservative Government were part of that process. We understand the pain and difficulty that that can cause, which is why we have tended to learn the lessons of history and do not wish to repeat them. We know about the problems and difficulties that can be caused, the amount of anxiety that there is and the huge sums spent on the possibility of change. That is why we, as a party of caution about the whole business, believe that the reorganisation of local government at this time is a distraction from the other things that local authorities need to be getting on with. It is an expensive distraction and the Government know exactly what they are doing.
The Minister said in his opening remarks that he had no plans to launch a new round of restructuring. Well, I thought that the whole purpose of the measure was to give effect to grass-roots opinion—people coming forward to the Government and clamouring for such an opportunity—not, as the hon. Member for City of Durham rightly pointed out, to launch a new round of local government restructuring through some top-down operation. However, that is what has covertly happened. A new round has been launched by the invitation set out in the White Paper and repeated under the Bill.
We doubt that there is financial benefit to the exercise. That issue came up a lot during our previous discussion when we asked various witnesses about the financial benefits. Last Thursday, I asked the Minister
“Do you think that we would be right to be wary of those who wave cost savings at their electors as the potential good news behind a restructuring, going by all our collective experience?”
The hon. Gentleman had the decency and good grace to say with a smile in response:
“The answer to that is yes.”—[Official Report, Local Government and Public Involvement in Health Bill Committee, 1 February 2007; c. 88.]
Of course it is. When I asked the chairman of the Conservative district councils whether in all his experience of local councils he had come across savings in local government reorganisation, he said, in what I thought was a remarkably cogent and objective performance before witnesses, “No, none whatsoever”. Yet, the Minister is saying from his considerable experience that we should all be wary about such matters. There are no financial benefits.

Andrew Stunell: I think that the hon. Gentleman needs to pause after making such a breathtaking claim. I support a great deal of what he is saying, but while it is true that the witness gave that evidence, he also said that he lived in a two-tier area that had not been subject to reorganisation anyway.

Alistair Burt: The witness said that he lived in a two-tier area where discussions had taken place and that he had decided not to put forward any bids. It is not an enforced process. It is a process that has been encouraged in the manner in which I described. It is clear from authorities that have decided not to take the bait or be sucked into the reorganisation trap that that can still happen. The Government have set the limit themselves by encouraging a relatively small number of bids to come forward. My point about how the process has been carried through is still valid.
Let us consider the written evidence on the cost of restructuring. Professor Malcolm Chisholm of Cambridge university put forward a series of concerns in his paper when he said:
“There is no reason to suppose that the conversion of districts to unitary status would be particularly relevant in raising the performance of councils in the discharge of their current district functions...Reorganisation costs will be in the range of £121 per head...In financial terms, however, the evidence shows that it is unrealistic to suppose that the creation of a single unitary council in an otherwise two-tier county area would generate financial savings, and that there is every prospect that on-going costs would in fact be increased”.
We are left puzzled about the financial benefit from the process that has been encouraged and kicked off by the Government.

John Pugh: Is the hon. Gentleman against reorganisation in principle? He seemed to say that there were never any benefits from it. Alternatively, is he against this particular mould of reorganisation?

Alistair Burt: We believe strongly that the reorganisation of local government at the present time is the wrong thing in the wrong place. The Government can claim that local government is outperforming virtually every other part of their empire in delivering efficiency and the results that they have been looking for. We cannot see that at the Home Office or in the health service, but we can see it in local government, in which councils have made tremendous efforts working under a very tight financial regime. Councils have been delivering. The hon. Member for High Peak spoke about the success of his local two-tier councils in delivering performance improvements and in working hard under the Government’s regime. But at present there is no evidence that local authorities should have to go through what they are being asked to go through.

Peter Soulsby: Does the hon. Gentleman accept that, for all the failings of the Banham process and the previous reorganisation rounds that have been mentioned, the unitary authorities that they created have demonstrated significant economies as a result of the change to unitary status? That applies to some unitary authorities in shire districts of precisely the type that he referred to, and the economies have been broadly welcomed by members of all parties in those authorities.

Alistair Burt: I hear what the hon. Gentleman says, but that is not a universal view. There is plenty of evidence that the financial pressures of restructuring do not of themselves produce economies. There have been economies across the board because the Government control the purse strings to an extraordinary extent. The hon. Gentleman will remember that Mid-Bedfordshire district council was rate-capped last year because its band D council tax went up by £1 per month. In percentage terms that was deemed to be above the limit, so controls were imposed. If one is working under that degree of financial control it is no wonder that economies are happening across the board.
The question is whether restructuring of itself achieves the job that it is meant to achieve, and on that the jury is well and truly out. There is no current reason to go down the road that the Government want to go down, and we are wary of the consequences to which savings will lead. The Minister has confirmed that all of us would be right to be wary of those who back up their plans for reorganisation with claims of savings. I presume that he is right in that proposition, and that the hon. Member for Bedford is rising to support him in making it.

Patrick Hall: I am rising to deal with the hon. Gentleman’s argument that there is no need for the process because existing councils are super-efficient. I suggest that he listen to his own constituents and to mine. He knows well that in Bedfordshire there is a bottom-up view that the county council is performing not at all well, and that there is general support for reform. I am happy for my view on the matter to be put to the test. The hon. Gentleman and I keep in touch with local people and he must surely be aware of the dissatisfaction with the performance of Bedfordshire county council and of the general wish of businesses and residents that we take advantage of the opportunity to restructure.

Alistair Burt: The hon. Gentleman makes an interesting point, which raises the question of how on earth we are to determine what constitutes a broad cross-section of support in relation to a particular proposal. He has his view, but Bedfordshire county council is fast improving, as the recent Audit Commission results have shown, and I do not think that there is evidence to support his proposition. It would be interesting if there were a referendum on the best form of local government for Bedfordshire. The Minister is aware that there is a plethora of proposals on the table. We can have any form or configuration of local government we want in Bedfordshire, as far as I can see—from three unitaries, if we include Luton, to one large unitary. The Minister has powers to direct and could create two unitaries—one based on Luton and one on Bedford.
There is no provision, however, for taking into account the views of the public and for obtaining support in the manner that the hon. Member for Bedford would plainly like. We agree that that, too, is a missing ingredient. There is no public limitation on the power to direct, and no suggestion that where it is applied it should be underpinned, as he suggested, on a grass-roots, bottom-up basis, by seeking the public’s views on the power to direct and on the creation of a particular geographical area.
The Minister could bring forward a proposal that none of the relevant councils in the county or shire and the districts and boroughs had made. That is what the Bill says. We do not know what will be done and there is no limitation on that, for instance, through a power to call a referendum.

Tom Levitt: The hon. Gentleman described my earlier intervention as hostile. I thought that I was being forensic, but let me try again.
I was interested in the hon. Gentleman’s comments about public opinion, and about learning from history. Will he take this opportunity to say categorically and on the record that the Conservative Government were wrong to direct the abolition of the metropolitan county councils and the Greater London council without any public consultation whatever?

Alistair Burt: Absolutely not. There are things one has to do. At the time, I was a Member of Parliament for a seat in the Greater Manchester council area, a council which was much unloved. The council never achieved a base of public support or anything like that. Its abolition was warmly welcomed by my constituents and has done little harm since. I stand by that reform, but the hon. Gentleman is right to raise the issue of the doubt in the minds of people about the powers of government when there is no underpinning public support, or evidence of public support through referendum or anything like that. I take that on board as a warning to Governments who seek to exercise power in the manner in which we were required to do by circumstances. Therefore, he makes a fair point. However, as I say, there is learning from history and that is what I am putting to the Minister in an effort to prevent him from falling into some of the same traps and difficulties.

Bob Neill: I have only a short point to make. Does my hon. Friend not agree that learning from the recent history of this Government reinforces his argument? On the one occasion when the Government have sought to change the structure in relation to the number of tiers of government anywhere in the United Kingdom, they had a referendum as to whether there should be a Greater London authority and a Mayor of London. If that was good enough in the London context, why should it not be elsewhere?

Alistair Burt: My hon. Friend speaks well. He makes the point extremely well about the underpinning of public support, of which we see a complete absence in the Bill and in the Government’s failure to bring forward an appropriate amendment at this stage.
I now turn to the assurances that have previously been given because I think that they are important. I have described why we are suspicious, our concern about the process, the dubious benefits that may come from it and the worry about taking too strong a directive power. That worry would appear to be shared by the Secretary of State and by the Minister himself.
On Second Reading, in answer to my hon. Friend, the shadow Secretary of State’s concerns, the Secretary of State said that
“we have already given a commitment to the LGA that we will narrow the scope of the power to direct, but that it may be necessary in the short term, as a result of the current invitation, to deal with residual areas to make the unitarisation proposal work. There is no intention to force any council down aroute that it does not want to go down.”—[Official Report,22 January 2007; Vol. 455, c. 1159.]
During the course of our witness sessions, I asked the witnesses from the Local Government Association when this commitment was made. Sir Jeremy Beecham said:
“The chairman of the association and I, together with the chief executive, met the Secretary of State about a month ago”,
so that would put it at the very end of December.Sir Jeremy Beecham added:
“The Secretary of State indicated that intention in clear terms, and the Minister for Local Government, present in this Committee, gave a similar assurance at the LGA’s assembly meeting in December. We have not yet seen any definitive wording, so we wanted to stake out our position in theclearest possible terms.”——[Official Report, Local Government and Public Involvement in Health Bill Public Bill Committee, 30 January 2007; c. 14]
Further, because the LGA has not seen any definitive wording, the briefing that it has given to this Committee stated very clearly:
“We are, however, resolutely opposed to impose restructuring and consequently opposed to the proposed Secretary of State powers to direct.”
There was nothing in a brief written shortly before this Committee convened about that limitation. Neither was there anything to suggest that it had been given these reassurances and therefore it was qualifying our objection. However, the LGA stated very clearly, because of the words in the Bill, that it cannot give its support and is resolutely opposed to the proposal.
Plenty of suggestions have been made that some limitation will be made, but we see nothing. The Bill was introduced weeks and weeks ago and, as my hon. Friend the Member for Poole said, there was shock because of the power to direct. Why has it taken so long? Why is there nothing there to give effect to the words of both the Minister and the Secretary of State that there would be some limiting power. Because of the absence of that, we are left with assurances.

Michael Fabricant: Would my hon. Friend like to speculate that perhaps the reason why the Government have not tabled an amendment is that the time between the evidence stage and the scrutiny stage is too short? Incidentally, it might be good advice to suggest that there is a longer gap between the two stages in future proceedings. Would it satisfy my hon. Friend if, in answer to his arguments, the Minister were to say, “Yes, it is our intention not to direct in the way that the hon. Gentleman suspects that we might and, on Report, the Government will table an amendment”?

Alistair Burt: My hon. Friend is exceptionally generous to the Government and has provided an explanation that may not be in the Minister’s written brief. I would be interested to hear what the Minister has to say about the amendments.

Phil Woolas: Resist.

Alistair Burt: It says there in his brief.
The time scale has been short, and that may be an issue, but I think that there is enough time. If the Government have the will and the barrage of criticism makes them uncomfortable, they have the opportunity to do something about it and get something on the record. They can say to the Committee and the House that they have taken the strictures seriously, and that, “We can understand where you are coming from. This is how we intend to go about it.” However, there is nothing at all in the Bill. It has been weeks and, in all fairness, it should be there. The Minister and his hon. Friends could have done better and avoided the concern by limiting the powers in the manner in which they have been discussed. However, they have taken no physical steps to do anything about it.
We are left with the Minister’s assurance and with his word. As the hon. Member for Hazel Grove said, for us that is no problem. The Minister’s word is his bond. There is no difficulty whatever with this particular Minister. He says that he will do something, and I accept it. His word is like a gold bar in a sea of Government bankruptcy. [Laughter.] His word is so good that I would dress it up in shirt and coat and take it down Biggleswade high street because I would be so confident that his word is an attractive proposition.
However, we live in difficult times; we live in changing times. Who knows what is circling around the Government at the moment that might propel the Minister from the position he holds so admirably into something else? It is beyond our ken. It may even be beyond the ken of the Metropolitan Police Commissioner, but things can happen quickly that can change the Government, and Minister and his right hon. Friend the Secretary of State may no longer find themselves in their present roles. Where would the assurance be then?
That is why, over the centuries, we have rightly come to rely on what is written down in a Bill and amendments as giving us more of a clue than the good intentions of honourable and well intentioned Ministers. I say to the Minister that, despite his assurances, there is nothing about the issue in the Bill, and because of that, the directions ought to go. He either adjourns the Committee now and makes a limiting proposal or we will have to press the matter to a Division.
I am grateful to have had this opportunity in Committee, and I think that the Minister can understand why we are concerned. I hope to receive an immediate concession on this most important point for the benefit of the Committee and the House as a whole.

Andrew Stunell: The Committee will note that the amendments were also submitted in our name. I want to hear the Minister say quite a lot more about what he intends to do with this power than he did when he was giving evidence on such an important matter. In replying to the earlier debate, he acknowledged that that power was one of the key points arising from the clause. As I outlined earlier, the Liberal Democrats do not wish to derail the process. We do not take the view that the hon. Member for North-East Bedfordshire put to the Committee a few minutes ago that the whole process should be abandoned.

Patrick Hall: I want to clarify the point about the Liberal Democrats’ position. The hon. Gentleman is adopting a constructive attitude to the matter, so why did the Liberal Democrats vote against the Bill on Second Reading?

Andrew Stunell: I refer the hon. Gentleman to Hansard. There are 100 and goodness knows how many clauses and 15 schedules in the Bill. The principle of a window as outlined by the Minister is in the Bill. With so many clauses, there are bound to be one or two with which the Liberal Democrats agree. We are not objecting to the process, although some of the mechanics of it are mistaken or have not been properly defined.
We are not against the process, but the power to direct is a serious problem. The Minister acknowledged that in what he said in discussions with the LGA and others about finding more appropriate ways in which to express the Government’s intention in the Bill. We are helping him to do that by providing him with the amendments necessary to restrict the powers of future Local Government Ministers and Secretaries of State to interfere with the local government structure.
We can look at the matter on several different levels. The 26 bids that have come in relate to 16 different geographical areas. I understand why the hon. Members for Bedford and for North-East Bedfordshire would get into a bit of a tizz about the process, because three separate applications have been made to the Minister by the people of Bedfordshire. Those members of the Committee are presented with a nightmare situation, and the hon. Member for North-East Bedfordshire has chosen to wake up from the nightmare and has said, “Let’s not do this at all” while the hon. Member for Bedford wants to be set free from the terrible Conservative-controlled county council. We do not have anyone in the Committee from the other authority that has put in a bid. It might have been more interesting had the Committee been more representative of the hon. Members from Bedfordshire.
The more serious point is that the Secretary of State will be required to take account of various criteria when judging a submission. In his evidence, the Minister made the point that the overall cost of proposals will be important, as will evidence of consent at local level. I am pretty sure that the Government, and in particular the Treasury, will take the cost argument very seriously. In fact, cost might well be an issue on which to veto a proposal, and I presume that if the Secretary of State for Communities and Local Government really wanted to, she would approve a proposal even if the arithmetic looked a little dodgy. Cost is therefore not an absolute criterion, however important it is.
The second criterion is consent. There is a conflict between the power to direct and the obligation to take account of consent. Let us suppose that the Secretary of State determined that there would be structural change in Bedfordshire. Whatever she decided, there would be some dissent in some part or other of Bedfordshire, or in all of Bedfordshire. That being the case, what exactly is the implication of the power to direct?
The Minister recognises that that is a problem, and that amendments to the Bill are required. The Liberal Democrats, through the proposal to remove the word “direct” from the Bill, are making it clear that the balance of the argument over proposals should switch to local consent rather than state direction. That is the right way to approach the matter.
The hon. Member for North-East Bedfordshire argued that it was some kind of deliberate Government ploy to distract local government from the real job of providing services. Machiavellian as this Government are, that is, perhaps, going a little too far. I recognise that people in parts of the country believe strongly that there is a need to reorganise their local government structures to provide a better service. I respect their right to hold that view and to promote it. The Secretary of State is right to provide a limited opportunity for them to put that case and for it to be judged.

Alistair Burt: Does the hon. Gentleman not feel that the Government’s relentless pressure about costs and the way they went about the process of encouraging councils to take a particular line—because it suited them and the Treasury—puts tremendous pressure on local authorities to do what the Government want? Everything in their assessment process is designed to please regional offices and the Department, as opposed to listening what their local electors are saying. My concern about the Machiavellian skills of the Government, if that is what they are, is well founded.

Andrew Stunell: Dearly though I love my local government colleagues, it is more like children being let out into the yard after a lesson, playing a game that is, in many cases, not constructive. I would not want to get into a competition with the hon. Gentleman about assessing how Machiavellian the Government are, but local government in some parts has been a willing contributor to what has happened since. It would be naive of us to pretend otherwise.
It is important to ensure that the Government, in exercising the powers that they will eventually get under the Bill, do so with proper regard not just to securing the cost element on any proposals that are advanced, but the consent element. They should also leave in a power of direction, so that if a Secretary of State gets fed up with the row in Bedfordshire he may decide, with the wisdom of Solomon, to cut it in two. If I remember right, it was at that point that the mothers came to their senses. Whether we shall see the same thing in Bedfordshire, I should not like to say.
We support the group of amendments, not entirely for the same reasons as the Conservatives, but because it is important to limit the Minister’s power to override local views and opinions when exercising his functions on the reorganisation of local authorities.

Phil Woolas: I found that a useful exchange to clarify the views of hon. Members. I particularly welcome the support of the hon. Member for Hazel Grove for the principle, which we are trying to achieve, of creating a permissive, bottom-up regime whereby the invitation to propose is exactly that. A number of authorities have chosen to accept that invitation. As has been mentioned, the proposals are not always compatible. Therefore, one must have objective criteria against which to judge them. Would that it were the case that there was consensus in each area. I suspect that the Secretary of State, my colleagues and I would be grateful for that.
The hon. Member for Hazel Grove also mentioned territorial ambitions and gave examples from his area. I should imagine that his constituents still say strongly that they live in Cheshire, as hon. Members in that part of the world will know. I warn him against territorial ambitions, because a major impact of such a takeover, if that is the right word, would be a direct effect on the council tax base, which he ought to study carefully if he wants to go down that route. On the surface there might be a positive effect, but there would be a negative effect on the revenue support grant.

Andrew Stunell: I do not want the Minister to think that a point made by way of illustration in debate constituted a 27th application to him. That was far from my intention.

Phil Woolas: I am sure that the hon. Gentleman’s constituents will be grateful for that clarification.
The hon. Member for North-East Bedfordshire seemed not to accept that the invitation process is a permissive one. Given their record on previous local government restructuring and reorganisation, Conservative Members such as the hon. Gentleman seem unable to believe that the Government will not behave as they did. It is interesting to debate the failings of earlier reorganisations under previous Governments, so I shall do so.
The hon. Member for Bromley and Chislehurst referred to the creation of the Greater London authority and of the role of Mayor of London, but he failed to point out that Conservative Members voted against the proposal for a devolutionary process. My hon. Friends in the Committee referred to the abolition of the metropolitan counties and of the GLC, which took place without a word of leave from the good people of Greater Manchester and of other parts of the country. I could also point to Scotland—I have not forgotten Wales—where unitary councils were imposed without consultation.

Bob Neill: I am grateful to the Minister for not forgetting the good people of Chislehurst. I speak as someone who was in a minority in my party in opposing the abolition of the GLC a long time ago. However, if the Minister thinks that he is right to take me and my hon. Friends to task on the basis of our stance on the GLA Bill, and if it was right that there should have been a referendum on changing the number of tiers of government in London, as perhaps in retrospect there should have been, why is it not right to have a referendum on that issue in one of our historic shire counties?

Phil Woolas: The hon. Gentleman is at least consistent. I did not say only that it was right to criticise the Conservative Front Bench; I said that it was good fun as well, and the hon. Gentleman will see that there is consistency in my argument too. The hon. Gentleman criticised the Government in relation to the north-east assembly referendum, but I recall that the Deputy Prime Minister accepted the result of that referendum, despite the Government’s known preference, so I do not see how we can be accused of inconsistency.
The Banham review created local authorities without consultative processes, and was again a top-down exercise, rather than a bottom-up one as proposed in the Bill. The former Deputy Prime Minister, Lord Heseltine, admitted in the “Local Government Chronicle” last summer that the eventual decisions on boundary reorganisation were taken after he had hired a helicopter to fly around England with some ordnance survey maps to point out where the boundaries might be. The right hon. Gentleman was admired for his cavalier attitude in many respects, but in my constituency the ancient boundaries of Yorkshire and Lancashire are still contested today, which is why I live at County End.

Alistair Burt: Although this is good fun and entertaining, I do not want us to move away from the central point made by my hon. Friend the Member for Bromley and Chislehurst, which has not been answered. This may be a learning process for me, and my hon. Friend may be consistent in his view about how to ensure the support of the people, but it comes back to the same thing: finding some measurable form of consultation, such as a referendum, to guarantee support for the proposals. Surely, after the litany that the Minister has produced, he is not suggesting that the Government should deal with the problems in areas where more than one solution is being advanced by using a Government decision and nothing else. We want to hear how he will underpin this provision through the mechanism of a referendum, unless the experience of his right hon. Friend the Deputy Prime Minister in the north-east has been so galling that he does not intend to allow the people to have their say again.

Phil Woolas: The hon. Gentleman makes an important point. Of course, the invitation to bid contains the criterion on public support. The point made by the hon. Member for Hazel Grove, quite reasonably, was that there can be contradictory views within a county area. It is because of that that the power is required, in a limited way, to ensure that a solution for one area of a county is not detrimental to another. Again, under the previous Banham process, it could be argued that that point was not taken into account.
Let me deal with the comment by the hon. Member for North-East Bedfordshire about consultation with officials, rather than with elected leaders, because that was made publicly and it is important to address it. The Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for South Shields (David Miliband), and I undertook a large number of meetings and consulted local authority leaders at that time to gather their views and try to find the best way forward. Perhaps I can explain about the cost, because the cost argument is central and I gave evidence on that. Let me emphasise, for the record, that the small number of authorities that we expect to be able to move forward on is based on the impact on local government assets and borrowing. It is a macro figure. That point is not contradictory to the one also contained in the criteria, which is that proposals advanced for a unitary authority must be self-financing within the five-year period and must not be detrimental on the council tax payer. That means an equalisation down, not up, in those areas.
I temper my view on this matter, as I said in my evidence. One has to be wary about local councils claiming benefits that could meet with the response, “Well, they would say that, wouldn’t they?” I hope that the hon. Members for North-East Bedfordshire and for Hazel Grove remember that principle when we are debating new burdens implications in other areas of legislation.

Alistair Burt: What ties the hon. Member for Hazel Grove and me together is that our experience of the impact of new regulatory burdens is pretty consistent: they put up costs. The impact on potential savings is much more mixed and lends credence to our view, which is that they do not materialise at all. They would say that about the regulatory burden, wouldn’t they? But they have good reason for saying so, because it usually ends up with the Government imposing larger council tax bills.

Phil Woolas: It usually ends up with local authorities saying so. My point about new burdens is that one has to consider net new burdens of cost, not the gross costs of new regulations. I receive many letters from council leaders, but I have never had one saying, “Dear Minister, due to the requirement no longer to practise archery on a Sunday, I send a cheque for £200.” I could give more serious examples.

Alistair Burt: Can the Minister just remind us what the average rise in band D council tax has been since his party came to office?

Phil Woolas: I can certainly re-emphasise that council tax is set by local councils. The hon. Gentleman makes a point about the rises in council tax when he is in the Chamber and claims credit for local Conservative councils when he is out on the stump. He cannot have it both ways.
The hon. Gentleman said that there was no evidence of why we should offer the invitation to propose. The evidence is in the proposals from councils. It is an invitation. Proposals have come forward, and they are not top-down proposals. It is up to councils to show public support, not for me to dictate to them how they should do so. The hon. Gentleman was kind—in fact, he was too kind—in his description of my intentions, but he said that the Opposition were suspicious. I repeat that that suspicion is based on their own behaviour under previous Governments. There is no evidence whatever that there is top-down direction to councils from Ministers and the Government.
It has been said that the Government are seeking a consensus with the Local Government Association. We share the view of Sir Jeremy Beecham that was put to the Committee last week that
“the power of direction should not extend beyond the current round of consideration of reorganisation.”—[Official Report, Standing Committee Local Government and Public Involvement in Health Bill, 30 January 2007; c. 13.]
That view was expressly supported by Richard Kemp, the leader of the LGA Liberal Democrat group when he gave evidence, and by Sir Simon Milton, the leader of the Conservative group of the LGA. I know it to be the view of the leader of the LGA, Lord Bruce-Lockhart. Indeed, Sir Simon confirmed that the view was that of the LGA and was a cross-party view.
As I made clear on Second Reading and when giving oral evidence in Committee last week, we are committed to clarifying this direction-making power. Our aim is to make clear that the purpose of the power is to enable action to be taken in the immediate follow-up to the current invitation process to deal with residual areas to make a unitarisation proposal work. We are clear that restructuring should be off the table after this current window of opportunity. However, the proposals that we have received may result in a situation when we need to use the narrow direction-making power that I have described.
If, for example, in a county area, we receive proposals that would have the effect of creating one or more unitary authorities for most of the existing county area, but left part of the area unaccounted for, we may need to use the direction-making power. We have made it clear in the invitation document that, when judging such a proposal against the criteria, our consideration must include that residual area, and quite rightly so.
It may be that the proposed new unitary and the residual area stand up against the criteria only if that residual area was unitary as well. Rather than simply rejecting the whole package, we may direct the council for the residual area to put forward a unitary proposal so the way would be open to our resolving the issue by creating unitary structures for the whole area.

Andrew Stunell: I am trying to follow the Minister’s argument. Let us consider a situation in which Bedfordshire has been called into account, and all but one of the districts were to be in a unitary authority and one district left over. Is he saying that that remaining district would be directed to join the unitary or would be it directed to form a separate unitary on its own? Or would it be either of those things?

Phil Woolas: I thank the hon. Gentleman, because that is the crux of the matter. The requirement to direct within the limited scope has support among some local authority areas and councils. It is important to recognise that support for such a power exists now and has existed in the past. It is precisely because of his point that we need to clarify matters and to have such a power. The answer is that a residual area would be required to put forward its preferred option, accounting for the potential of the proposal being accepted by neighbouring areas—one might describe it as a least-worst option, but it will ensure that there is fairness.
I cannot refer to individual proposals because I suspect that my words will be used, but one can imagine circumstances similar to those experienced in the 1990s in Lancashire, when the unitary authorities of Blackburn and Darwen, and Blackpool, were created out of the county area. Under the Bill, consideration would have to have been given to the residual area of the county of Lancashire. If there was no power of direction, the danger would be that the Government would have an over-powerful lever, which is what the hon. Member for North-East Bedfordshire fears. In such circumstances, a decision could be made for one area within a county, regardless of the effect that it would have on the rest of that county. I do not think that Opposition Members would want the Government to have such power, and I do not think that we will.

Robert Syms: There was an example when London county council was extended via the Greater London council and Middlesex was included. One part of Middlesex—Staines, Spelthorne—did not want to go into the GLC, and eventually found itself in Surrey, where it is today. Presumably, that is the sort of instance in which one would use the power to direct. There might be one area that does not want to go in the direction of others and, given public consent, it would have the option of going into another authority.

Phil Woolas: My knowledge of the geography of Staines leads to me to conclude that the answer is yes. Members of the Committee may understand that the rateable business rate valuation in that part of Greater London is a highly contested issue. I think that Hounslow and Hillingdon had a boundary change on that basis. As I said, the answer to the question is yes. The Government have a responsibility to ensure the well-being of the whole area, as opposed to absolute consent, which is desirable but not always possible.

Alistair Burt: I am grateful to the Minister because for some local authorities this is the absolute meat of the issue. Is he saying that the Secretary of State will have powers to give a direction that would produce a solution that no authority has actually proposed? A solution for an area may not, in the view of the Secretary of State, bring about effective local government. Is the Minister saying that the Secretary of State would have the power to propose a solution that was not already on the table? In other words, will a response to an invitation produce an opportunity for the withdrawal of an area at the Secretary of State’s power of direction?

Phil Woolas: The hon. Gentleman pushes a very important point. It is the Government’s intention that the process should be permissive. There is potential for decisions to create a situation in which everybody is unhappy, rather than half of an area being happy. To be honest, it is partly for that reason that the drafting of the Government’s amendment and discussions with the LGA have not yet appeared before the Committee, as was requested by the hon. Member for Lichfield. He very skilfully brought up the point about the two-weekends’ gap, and I congratulate him on getting that into Hansard. We intend to table amendments to limit the scope of the power to direct, along the criteria that the hon. Member for Hazel Grove requested.

Andrew Stunell: This is the crux of a very important point, and I appreciate the frankness with which the Minister is dealing with it. Will he confirm that under the Bill a direction does not have to follow an invitation? In other words, there is an invitation but somebody else, who has not put in a bid, might be directed to do something notwithstanding all that.

Phil Woolas: The hon. Gentleman is describing a jigsaw puzzle. If one were to take a unitary proposal for a certain area in a county, another district geographically distant from the proposal might reconsider its own position. As the hon. Member for Poole mentioned, it could do that across a county boundary. The intention of the Government is to limit the power of direction to those areas directly affected and not to allow areas that have not come forward with proposals to have a second bite at the cherry. We are keen to avoid such a potential disturbance to local government. Remember our policy on the three-year stable funding period.
The Local Government Association’s anxiety—it was a concern rather than a shock, although I understand that people would say such things in order to force a point—is about the unintended consequence of Government policy. Again, that is why I am cautious about ensuring that my reassurances to the Committee and the LGA are delivered by the Government’s proposed amendments. I explain why they had not yet been introduced in response to a point raised by the hon. Member for Lichfield.

John Pugh: Will the Minister give way?

Phil Woolas: I shall just set out our position and then give way to the hon. Gentleman.
We are in discussion with the LGA on that point. Following that and, to be frank, this Committee debate, we intend to introduce amendments. We want to hear from the Committee so that we can carefully consider the best way forward. One possible approach would be to provide that the power be available for one year after 25 January 2007—the date by which proposals in response to the invitation had to be received. Of course, that date has now passed. That amendment could be combined with a formal undertaking to the House that, in that period, we would use the direction power only to deal with residual areas in order to ensure that a proposal received last month works properly.

John Pugh: I understand the Minister’s caution, but the point made by my hon. Friend the Member for Hazel Grove, which was not responded to directly, was perfectly clear. Under the Bill, as it now reads, it seems logical that there could be a direction in the absence of an invitation. A direction should be given only if there is an outfall from invitations, but the Bill actually allows for more than that. Is the Minister saying that he will bring forward amendments that will preclude the possibility of such a direction being made in the absence of invitation?

Phil Woolas: Yes. This Government are not a centralising one and so I can answer that question in the affirmative. [Interruption.] Opposition Members seem incapable of believing that our motives are not the same as theirs.

Patrick Hall: The point that the Minister has just made underscores the necessity of time limiting the power of direction. The honesty of the hon. Member for North-East Bedfordshire has warned us that, should there ever be a change of Government, a centralising direction would return. Conservatives thoroughly enjoyed moving in that direction when they were in power.

Phil Woolas: For 10 years I have believed that one of the major failings of the Conservative party is precisely that it ascribes its motives to us. I accept the flattering remarks about my own assurances made by the hon. Member for North-East Bedfordshire, but there is a record, over decades, of central imposition of local government restructuring. For all the fine words and criticism about letting go, the statement of the right hon. Member for Witney (Mr. Cameron) to the LGA that there would be no ring-fenced budgets for local government is breathtaking in either its naivety or its disingenuousness. However, I can see you getting nervous, Mr. Benton—although not as nervous as any potential future local government would be under a Government with such a policy.
The Government’s approach is devolutionary. It is for local authorities to tell us the best solution for their area. The reason for that, apart from what is apparent, is that the geographies and economies of local areas are very different. It is precisely because the Government want to give, through the Bill, greater powers to influence areas’ economy and cultural and social well-being, that we must take a devolutionary approach; it is a consequence of the policy.
The local authorities are the ones that understand their areas best. It should therefore be for them to present more coherent proposals before the Government involve the boundary committee. I am sure, or at least I hope, that the Committee will agree that allowing local authorities to be in control of their future is more desirable than leaving it to the boundary committee to make a recommendation for an area. For those reasons I believe that a narrow direction-making power is the most sensible solution. The Committee will also be aware that the boundary committee’s advice cannot be sought until after the Bill receives Royal Assent, should that be the will of the House.
I hope that, with those assurances and explanations, the hon. Gentleman will feel able to withdraw the amendment, and move on to further discussion.

Alistair Burt: I am grateful to the Minister for setting things out so clearly and straightforwardly, as he tends to do. We still resile slightly from the gibes about centralism. Unlock Democracy, which gave evidence to us, states on the second page of its briefing:
“The Government have made much of their belief in devolving power but seem unwilling in the last instance to actually let go.”
That last phrase is one that we have heard more than once around this place, and if the Minister believes that the Government are seen by the world outside as a non-centralising Government and that the Chancellor is seen as the great devolver of power, I suspect that the powers of self-delusion are alive and well, and that Unlock Democracy has got it right.
It is precisely because the Conservative party has learned some lessons about the changing nature of the relationship between central and local government—something that we discussed at the beginning of the open witness sitting last week—that we have accepted that some past approaches did not create a basis for the right relationship between them. That is why we have moved on. It will be interesting to note the Government response to the challenges in the Sustainable Communities Bill, and how they will vote on it in due course, to discover how devolving of power they want to be.
I hear what the Minister says about local authorities coming forward with proposals to show how consent should be measured, but virtually everything else that local authorities do is prescribed by statute, and I do not know why that matter should have been left so open, beyond the fact that the Government did not want to prescribe a referendum or anything of that kind, so they have tossed it back to local authorities. Asking them to come forward with the ideas now, when authorities have already decided to make their bids, without having the chance to consult people, suggests, again, a concentration of time scale that has not been good for the process as a whole. I note that there is no suggestion that anything can be put in the Bill now. Given where the Minister was going, I was slightly worried about whether he wanted either to retain all the powers and just give the general direction that he has given in the Committee or to prescribe them, but from what he has said I assume that something will come forward.
In view of that, and on the assumption that an amendment or a limiting power will be put to the Committee before Report, we are happy to withdraw the amendment. It is our intention to leave the debate open until Report stage if we believe that the circumstances will allow. I do not know whether the hon. Member for Hazel Grove feels the same, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Robert Syms: I beg to move amendment No. 12, in clause 2, page 2, leave out line 9.

Joe Benton: With this it will be convenient to discuss the following amendments: No. 13, in clause 2, page 2, line 18, leave out subsection (4).
No. 14, in clause 2, page 2, leave out lines 25 and 26.
No. 15, in clause 2, page 2, line 27, leave out ‘or C’.
 No. 16, in clause 2, page 2, line 39, leave out ‘Type C’.
 No. 17, in clause 5, page 4, line 14, leave out ‘Type C’.
No. 51, in clause 23, page 14, line 18, leave out ‘Type C’.
No. 18, in clause 23, page 14, line 29, leave out ‘Type C’.

Robert Syms: It is a pleasure to serve in a Committee that you are chairing yet again, Mr. Benton.
I had 15 years in local government in the great city, and at one stage county, of Bristol, and I went to school there as a boy. I remember clearly the local government reorganisations of the early 1970s. A lot of them were logical, but they crossed county boundaries and caused problems as a result of that, simply because local communities felt ill at ease in the local authorities that had been created, even though Parliament had proposed them. When I was at school, there was a “Back to Somerset” campaign for parts of north Somerset. Some people wished to be in Gloucester, while Bristol regretted the loss of its status as a city and county. In later years, when I was leader of a district council, the Association of District Councils was bedevilled with arguments from the larger district councils, many of which had been county boroughs, about the return of their status.
 The Government’s type C proposal, which may include a unitary authority that crosses county boundaries, is extremely brave. Although it is sometimes perfectly possible to construct a logical structure for local government, all sorts of consequences come from crossing county boundaries.

Michael Fabricant: On the very question of consequences, it was revealing that when we asked that the boundary committee for England to give evidence orally, we were refused. I wonder whether my hon. Friend would care to comment on whether one consequence of crossing county boundaries might be the forced redrawing of parliamentary boundaries, which is a particularly poignant issue, seeing as we have only just gone through a boundary review.

Robert Syms: To pick up my hon. Friend’s point, parliamentary boundaries are often adjusted to local government boundaries, so if they were changed, there would be no immediate effect. However, if we create the building blocks—which are the local authorities for parliamentary seats—that might be relevant in the longer term to how people are represented, if we maintain the first-past-the-post system, as I hope we do.
The type C proposal, which crosses county boundaries, will probably cause more grief than the Government would like, simply because people do not like it. The Minister mentioned the difficulties in the changes of the ’70s for those who considered themselves as Lancastrian or from Yorkshire, but there are still those feelings even today, 30 or 40 years after the reorganisation, and there probably will be for many decades ahead.

Phil Woolas: For centuries ahead.

Robert Syms: Indeed. We have been political point scoring about which Governments have done what to local government, but all Governments have form in how they have dealt with local government. If one believes in local government, there are strong arguments for giving local authorities much more power to resist some of the things that central Government want to do to them.
The Banham proposals unpicked some of the proposals from the early 1970s that did not stick because they did not have public consent. Humberside is logical, but people did not feel part of Humberside. Avon is logical, but people still feel that they are Bristolians or from Somerset or Gloucestershire. That is what forced the Government to reconsider the issue, whether or not there were referendums. Many of the Banham proposals had more public consent than those that were imposed in the early 1970s and nobody argued with that.
Our anxiety about the type C proposal is that reorganisation across county boundaries risks undermining public consent because people feel an affinity with and a loyalty to counties or larger cities. I am doubtful that any proposal would get public support across the county boundary—I see that a number of hon. Members are nodding at what I say.
I should like the Minister to flesh out the proposal. Where would a type C proposal be made? Does he have any examples? I am trying to tempt the hon. Gentleman because some of the boundaries were drawn by the Victorians and the Edwardians. Places have grown and things have moved on since then, but nevertheless people feel loyalty to their local community, which may create difficulties.
The amendment was designed to test why the proposal is in the Bill and to have a decent debate on the clause. Has the Minister thought of the longer-term consequences? I should be surprised if there were any type C proposals; there were none in the first tranche. If no one proposes anything that goes across county boundaries it may be better to debate the type As and type Bs. The recent history of local government reorganisation has proved that crossing county boundaries creates more grief, and in the longer term the issue has to be revisited because there is no public consent.

Andrew Stunell: These are interesting amendments because they are irrelevant if the Minister’s proposals are limited by time as none of them cross county boundaries. If the Minister loses his power of direction or it is limited along the lines of our previous debate the proposals lose their force. However, while there is no time limit and we do not know what the direction restriction will be, the amendments are relevant and they need to be tested. We will support the amendments on the basis that without the time and the power restriction, the geography restriction is needed as a fallback.
The Minister said that he lived at County End but he did not say which side of the line he lived; perhaps he does not want to disclose it to the Committee. The example of Middlesex was given and I gave the example of Poynton. The Minister rightly said that many of my constituents like to say that they live in Cheshire; others like to say that they live in Derbyshire. 
Those historic boundaries have had great force and meaning for people for a very long time. Removing type C in the current context is neither here nor there, but the proposal is another prod to the Minister to ensure that he gets the time and the powers sorted out so that he does not have to fuss about the geography.

Phil Woolas: The hon. Gentlemen have again made reasonable points. It is straightforward in debates to talk about county affiliations, but the issue is important, as they said. It is 35 years since the legislation that changed the county boundaries went through Parliament, and it is still debated in many parts of the country—often with a passion that some of us do not appreciate.
I shall, if I may, indulge the Committee with the story of the Austerlands cricket club, which is on the boundary of Yorkshire and Lancashire. It is the second highest cricket club above sea level in the country. The groundsman invited the local borough surveyor to ascertain whether the club remained in Lancashire or had been moved to Yorkshire. One can imagine the passion that that debate excited. The surveyor pointed out that the stream to the east of the club was the boundary, and he assured him that the club remained in Lancashire. The groundsman replied that he was very relieved, because he had heard that they had very bad winters in Yorkshire and he did not want his pitch to be ruined.
One proposal in the current round following the invitation crosses county boundaries. It is the proposal from the East Riding authority in respect of the Selby district, which is the county of North Yorkshire. From memory, I do not think that the people of Selby think that they are in North Yorkshire. East Riding itself was created by the process that the hon. Member for Poole described: an unpicking of the 1972 Act, when Humberside was created. That left the city of Hull, north-east Lincolnshire, East Lindsay and Scunthorpe, I think, but I shall check the latter. There is therefore a type C proposal in the current proposals, and precisely because the legislation is devolutionary, we wish to see type C proposals. It is not for the Government to judge whether proposals should be restricted. Indeed, in some areas of the country, some of the best two-tier working runs across county boundaries with counties and districts co-operating.
I recently visited Breckland, where three districts—one in Norfolk, one in Suffolk and one in Cambridgeshire—co-operate on revenue and benefits. They have, by all accounts, one of the if not the most efficient revenue and benefits departments in the country, precisely because the geography of that part of East Anglia makes it more sensible for them to co-operate. They have not made a proposal to go unitary; they do not see the requirement for it. However, as we encourage co-operation across boundaries, particularly on commissioning policy, there are circumstances in which closer co-operation across county boundaries makes sense. Authorities in such areas may wish to put forward proposals, but it is for them to judge and, consequently, for them rather than for central Government to take the blame.
The Bill is drafted to enable us to respond to the proposals made by the councils themselves. They will have the opportunity to tell Government, and through Government Parliament, the best solution for their area. They are best placed to understand their areas, and it is therefore right that they should be the ones who come forward with coherent proposals. To support that approach, we have drafted the Bill so that local authorities have the flexibility they need to frame any potential unitary proposals, provided only that they use existing district boundaries as the building blocks. That provision refers to the points that the hon. Members for Hazel Grove and for North-East Bedfordshire made on shifting and abolition of boundaries.
If the amendment were agreed to, it would limit the options available to local authorities to make the proposals that in their—not our—judgment would provide the best structure to deliver effective and convenient local government. The Bill will allow authorities a wide range of options to make proposals for unitary government. Crucially, local councils will not be constrained when they consider how best to administer local government functions in their areas.
As I said, among the 26 proposals that have been referred to is one from East Riding to merge with the neighbouring district of Selby. The permissive devolutionary approach recognises the configuration of counties and the affiliation that the public have with their areas. I concur with the wise words of the hon. Member for Poole in that respect. It is a central tenet of the Bill to create sustainable communities.

Michael Fabricant: I am interested in the Minister’s explanation, but I am still curious about the parliamentary boundary question. Am I right in saying that a parliamentary constituency boundary cannot cross county boundaries? If another district were brought into a county, dividing an existing parliamentary constituency between more than one county, would that necessitate a change?

Phil Woolas: I have been honest with the Committee this morning, and I will be honest again—I do not know. I hope that that reassures the hon. Gentleman that there is no Machiavellian plot. However, immediately after the sitting, I will go to the Library, get a map and find Lichfield.
The hon. Member for Poole answered that point. My understanding is that in the long term, that could be the case. In the instance of Selby and East Riding, one would have a very strong argument for asking not which county but which Riding one was in. Hon. Members who know the county of Yorkshire will know that that largely determines many people’s affiliation.

Michael Fabricant: I would be grateful if the Minister could come back in the next sitting with clarification.

Phil Woolas: I will do as the hon. Gentleman asks.I hope that my explanation and the information that I have given about bids means that we can move on. I hope that the debate has served to explain the purpose of the provision. I therefore invite the hon. Member for Poole to withdraw his amendment.

Robert Syms: I would like to pick up the point about the boundary commission. I think that I am right in saying that the boundaries are drawn on county boundaries, but if county boundaries change, it does not invalidate the constituency until the next redrawing. For example, Leominster, which is now in Worcestershire, and Hereford, which is now in Herefordshire, were in one county. There is an adjustment of boundaries in the current review: some 8,000 electors will go from Worcestershire into Herefordshire simply to realign the boundaries with changes resulting from the Banham review, so the question is a slight red herring. However, if new county boundaries are fixed, it will change things the next time the building blocks are revised.
To be honest, I have had so much paper that the Minister should forgive me for missing proposal No. 10 on East Riding. Of course, it does not invalidate some of the things that I was saying. East Riding is an area that has had rather more local government reform and change than most others in the UK, what with Humberside and a unitary Selby losing its northern bit into a York unitary, creating a very small Selby authority covering 50,000-odd people. The proposal may therefore be logical. I was sceptical at first, but the Minister has convinced me that that type C proposal is sensible. Specifically in that particular area of the country, there may be arguments of local support and loyalty—that is essentially the argument that I was making—that fit into that particular proposal.

Phil Woolas: I am sorry to delay the Committee, but I would like to clarify what the hon. Gentleman said about the boundary commissions. Parliamentary boundaries would not change initially. The parliamentary boundary commission could conduct interim reviews; otherwise, changes could be made as part of the sixth general review. The hon. Gentleman is correct.

Robert Syms: I thank the Minister for reinforcing my comments. Having heard the explanation and looked at that specific example concerning questions of interest, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Joe Benton: We come now to amendmentsNos. 23 and 24. I call Andrew Stunell to move the lead amendment.

Andrew Stunell: Mr. Benton, the Clerks usually do an excellent job, but the amendments are two strays that belong to the second group of amendments. The issue has been debated as far as we are concerned, and we do not wish to proceed with the amendments.

Clause 2 ordered to stand part of the Bill.

Clause 3

Invitations, directions and proposals: supplementary

Question proposed, That the clause stand part of the Bill.

Alistair Burt: I should be grateful if the Minister bent his mind to a couple of issues arising fromclause 3. I draw attention to subsection (1), which states that
“The Secretary of State may give a direction under section 2 only where he believes that it would be in the interests of effective and convenient local government to do so”
and to subsection (7), which states:
“An invitation or direction under section 2 may be varied or revoked.”
Will the Minister clarify what he means by effective and convenient local government? The powers are broad ranging and sweeping. I ask because we have determined that although he might be constrained to limit his power of direction in terms of geography and time, he has not given a clear sense whether his power of direction will be coupled with any locally derived consent that he will prescribe should be measured by a referendum or in any other way. We are still left with a Bill that gives him very wide powers. Phrases such as
“effective and convenient local government”
lead us to think how controlling and centralising the Government have been of local government, and of the sense out there about the Government’s powers and local authorities’ relationship with his Department and the wider electorate.
In recent years, in conversations with local government representatives, it has become increasingly clear that the power of the assessment and audit process and the number of targets and quotas that local government must meet have become so onerous that local authorities are no longer looking outward to the electorate. Instead, they are looking upward to the Departments and the bodies that regulate and inspect them. Individual chief executives will complain, but the evidence is plain from the inspection regime, some of which the Minister intends to cull using the Bill. There has been an incredibly damaging effect on the relationship between central Government and local government, and between local government, its electors and councillors. The overwhelming sense now is that local government exists to further central Government’s agenda—it is there to deliver what the Government want to see happen at local level.
Part of that relates to the financing of local government, which returns us to a theme of our discussions with the witnesses who came before the Committee, and indeed with some who did not come before the Committee. Because the relationship between local and central Government is so intimately tied up with financing, it would have benefited us to listen to what Michael Lyons has in mind for the future financing of local government.
We contend that if the definition of effective and convenient local government still means essentially that local government delivers what central Government want, with considerable pain for local government if it does not, there is a risk that the Government will not find the support that they are seeking for their proposals because public suspicion that everything is controlled from Whitehall will not be diminished.
If individual officers are asked to do work that is not prescribed in the assessment process, or if things need to be done by the local authority that have no particular tick box and will not be looked for in the comprehensive assessment process, they know that the time that they spend on it will be time wasted from dealing with the things that the Government have asked them to do. Individual officers know that they are rated as much on how their department has delivered what the Government wanted from it as on their service to the public. In the event of a conflict, they know where their duties and loyalties lie—with the people who are paying the bills, and those assessing their careers and how they are delivering. The whole notion of
“effective and convenient local government”
leads one to ask, “effective for whom?” and “convenient to whom?” We are seriously concerned that, without any limiting powers or the matter being considered during our deliberations on the power of direction, the phrase reinforces that sense of the centralism of local government and its power.
I return to the briefing that we had from Unlock Democracy, which, if I may remind the Committee, is the coming together of Charter 88 and New Politics Network. I know that certain of my colleagues have moved quite a long way in their politics in recent years—a matter of some delight and joy to me—but associating the Conservative party with Charter 88 is probably a little far-fetched. That group cannot in any way be suggested to be a form of Tory stooge body, or anything like that. When Unlock Democracy says in its briefing that,
“The UK is the second most centralised country”
in the EU, as
“94 per cent. of all tax revenue in this country goes through central government; the average in the European Union is... about 50 per cent... In the long run as long as central government raises the overwhelming majority of the money spent by local authorities then Councils will be beholden to central government... Central government will want to direct how money is spent, or, in the words of an old saying, ‘He who pays the piper calls the tune’”
it reveals the sense out there that local government has to respond to the demands of central Government and that their relationship is breaking down. That relationship, in which strong-minded local councils have a degree of autonomy, with the ability to say no to Government, to be backed up by their local electors and, sometimes, to be wrong in their judgment, has been seriously circumscribed in recent years. We have played our part in that—we understand that. But before we hear the rigmarole about the power of central Government, let me state clearly that we have learned from this process about the dangerous breakdown in relationships between councillors and their electorate and between councils and central Government. That is why we are so concerned about this issue now.

Patrick Hall: I am following the hon. Gentleman’s speech closely. Is he indicating that the Conservative party is now ready to support the relocalisation of the business rate?

Alistair Burt: I am grateful—

Joe Benton: Order. I am sorry, but business rates have nothing to do with the clause. I have to rule that out of order.

Alistair Burt: You are correct, Mr. Benton. Of course, had Michael Lyons come before us, the business rate might well have been before the Committee, but we will never know. The hon. Gentleman will have to wait a little longer to find out the views of my colleagues on that.
I am sure that the point that I am making—the picture that I am building—is not unfamiliar to any member of the Committee. There is a sense that local government is now terribly prescribed by central Government, so that when we see a phrase in the Bill saying that the Minister is able to take action in what he believes is in the best interests of
“effective and convenient local government”,
we conclude that it can only mean that, yet again, the decision-making process is moved far away from what local people may think—even if they might be wrong—and transferred to his office.
I would like to hear the Minister’s comments because we have begun a dialogue about those concerns. The Minister believes that the Bill is a seriously devolving measure and many of his comments and the briefings about the Bill suggest that the Government believe that, but there is a degree of hesitation in the wider world about whether that is truly the case. I am giving the Minister another opportunity to say now, in this debate on clause 3 stand part, why he thinks that the measure is rather more devolving of power than people outside think it is, and why we should not be as afraid of that phrase as it stands.
My second point is on subsection (7), which states:
“An invitation or direction under section 2 may be varied or revoked.”
Again, our concern is with the Minister’s power to make adjustments to the bids that he has been receiving, which could allow him to invent virtually any pattern of local government in an area that he wants. That question has not been fully tied up. I asked him whether it was possible for a proposal to come forward under his direction for a solution to local government in a geographical area that had not been brought forward by one of the parties involved, because he found that the proposals were all mutually contradictory and his own view of what constituted effective and convenient local government conflicted with theirs, with the result that he issued a direction and varied an order to the extent that he wished in order to create a geographical area and structure different from any of those that were previously proposed. As far as I can see, the Minister is able to do that. That power is very wide and I would like him to spell out how he sees it being constrained. How will he make sure that there is a way of ensuring that there is a degree of public support for his proposal?
On behalf of those of us who live in Bedfordshire, I have to say that it is currently the most exciting area for local government in the entire country. I am sure that the hon. Member for Bedford will confirm that it has every prospect of being so for several months to come as we head not only towards local government elections, but to mayoral elections in Bedford borough. It could turn out to be the case study on the remodelling of local government for our generation. The fact that there are some voices saying, “Leave it all alone, Minister. There is a perfectly decent two-tier structure,” as so determinedly championed by the hon. Member for High Peak earlier, only adds to the mix. However, it is possible for the Minister to draw out from all the proposals that have come forward a determination simply to leave things as they are.
The Committee would like to hear from the Minister what factors he will take into account when making decisions in which he has such widespread discretion. What does he consider to be effective and convenient local government? What sort of reasons would make him use his powers to vary or revoke an order? Until those are spelled out in more detail, we cannot give a clean bill of health to clause 3.

Phil Woolas: I am happy to try to answer thehon. Gentleman’s questions. He commented on centralisation and alleged over-burdensome regulation. I wish to come to those points in the part of the Bill that deals with performance assessment but will briefly make one comment, namely that legislative measures have been taken to devolve such powers.
A case in point is the Licensing Act 2003, the heart of which gave local authorities greater freedoms from central Government agencies and others to provide for a more joined-up licensing regime in their areas. As part of that process, the proposal to allow flexibility in licensing times for premises selling alcohol was a devolutionary measure. However, it would not have been recognised as such from the Opposition’s response and the public debate that ensued, which went along the lines that the Government were going to force people to drink for 24 hours.

Alistair Burt: They want something to do before the casinos open.

Phil Woolas: Again, the hon. Gentleman intervenes from a sedentary position. I find it remarkable that his party should be—how can I describe it—in favour of such a nanny state.
Nevertheless, the serious point is that these proposals bear some relation to the relationships with central and local government. It is precisely because of the point that the hon. Gentleman makes that I have difficulty with that part of the Sustainable Communities Bill that deals with the national plan and the division of finances. I believe that that would be a centralising measure, not the devolutionary one that this Bill helps us create. However, I can see, Mr. Benton, that you do not want me to go down that route.
Clause 3 limits the Secretary of State’s power to direct authorities to come forward with proposals for unitary government. The Secretary of State may only direct an authority under clause 2 when she believes that it would be in the interests of effective and convenient local government, ensuring that whatever arrangements are put in place are fit for purpose, deliver cost-efficient and effective services and democratic accountability.
The hon. Gentleman asked why we had included in the Bill the reference to “effective and convenient” local government. The concept of something being in the interests of effective and convenient local government is of long standing in legislation. For example, under the Local Government Act 1972, that test had to be met by any boundary changes. It also underpinned the restructuring following the Banham reviews under the Local Government Act 1992. The concept has been understood in the context of a local authority’s ability to deliver quality local services economically, efficiently and effectively, and in order to give local people a democratic voice in the decisions that affect them. The reason for including the words “effective and convenient” is to bring this long-understood concept into any decision on restructuring.

Alistair Burt: I am perfectly comfortable with the phrase and I understand where it comes from. My point was to ask the Minister whether he feels that its meaning has changed over the years as a result of the concerns that I raised on behalf of local government. The feeling in local government is that “effective and convenient” now means what is effective and convenient to his Department, not necessarily to the people whom local authorities serve.

Phil Woolas: The hon. Gentleman is trying to tempt me into a debate on performance assessment and the local target regime. I am happy to discuss that later. I do not accept the point that he makes on this clause.
 The clause provides that the Secretary of State can set a deadline for the receipt of proposals, and it provides that any proposal made as a result of an invitation or direction, as defined under clause 2, must contain an area that is currently two-tier. The chapter provides a framework for structural change, so it would not make sense for proposals to be submitted from existing unitary areas. In addition, it would not be appropriate for an authority that is currently single-tier to submit a proposal through which it would seek to merge with an adjoining area that is also unitary and thus expand its boundaries, which was the point made by the hon. Member for Hazel Grove. I do not know whether my hon. Friend the Member for Denton and Reddish would agree with that point in respect of Stockport, but perhaps we should not go down that road.
Subsection (5) provides that when submitting a proposal, an authority must have regard to any guidance issued by the Secretary of State as to what the proposal seeks to achieve and matters that should be taken into account. This chapter provides the broad framework for structural change, and the guidance issued by the Secretary of State is essential in supporting that. The guidance for the invitations, for example, sets out the criteria against which proposals would be judged, such as affordability and the ability of the new structure to provide strong, effective and accountable strategic leadership for the local authority area. It is perfectly reasonable and appropriate for such matters to be included within guidance.
A proposal can be submitted by a single authority or jointly by a number of authorities. That will allow for circumstances in which there may be a number of authorities in an area that wish to merge and would like to submit one joint proposal. The hon. Member for North-East Bedfordshire drew attention to clause 3(7) and the power to vary or revoke an invitation or direction, and again I can give him assurances as to why an invitation could be changed in such a way. It could be the case that an invitation has been made to two councils and, after discussions, it becomes apparent that a third council should be involved with the potential restructuring. We may also want to vary the deadline for submission of proposals as a result of such conversations.
On the other point, there may be particular local circumstances, such as avian flu, or foot and mouth might be a better example, where, if an area were involved in discussions about changes in structure, it would be inappropriate for those to continue. It is with that intent that we have drafted the clause.
The clause allows, therefore, the Secretary of State and local authorities to act in respect of an invitation or direction. We are creating a framework for a permissive structure to allow proposals to come from the bottom up. The hon. Gentleman is reasonably questioning their remit, but I hope that I have reassured him of the good intention behind the clause. Therefore I commend it to the Committee.

Question put and agreed to.

Clause 3 ordered to stand part of the Bill.

Clause 4

Procedure on receipt of proposals

Question proposed, That the clause stand part of the Bill.

Robert Syms: Will the Minister say a little more about consultation, because we live in an age of consultation but people do not always pay attention to what they are consulting on? We have already raised the issue of referendums. Would he rule out the use of referendums as part of the consultation process, or rule it in? Would it be appropriate in certain circumstances? At the moment, we can consult till the cows come home but if we do not pay attention to what people want locally, it does not make much difference.

Phil Woolas: I thank the hon. Gentleman for his remarks and their brevity, because it is a simple and important point. Let me outline what the clause is intended to achieve and then answer the specific question on referendums. The clause sets out the procedure for the Secretary of State to follow on receipt of a proposal for a single tier. If a proposal has been submitted jointly by all the authorities covered by the proposal, the Secretary of State may choose whether to consult any other person she believes to have an interest in the proposal. Otherwise, the Secretary of State must consult every authority whose area is covered by the proposal, other than the authority or authorities that submitted the proposal; and any other person she believes to have an interest. This consultation is to allow other interested local authorities and interested parties to have a formal opportunity to comment on proposals. However, one of the criteria on which proposals in this round of restructuring will be judged is
“a broad cross section of support”.
Proposals will therefore have to demonstrate support from a range of key partners, stakeholders and service users, namely the citizens.
Subsection (5) provides that the Secretary of State may request advice from the boundary committee on any matter relating to the proposal. This is to allowher to gain independent advice on any matter inthe proposal or a matter that is perhaps missing from the proposal. For example, she may ask for advice on the suggested boundaries set out in the proposal. She may set a date for the receipt of advice from the boundary committee and she may change that date later on. This may be necessary, for example, if it becomes apparent that the boundary committee needs more time to advise fully on the point raised or needs time to consult on an alternative proposal before submitting it to the Secretary of State under clause 6(4).
We are trying to create a framework that allows a bottom-up proposal and it is for the council to provide evidence of public support for the proposals rather than for the Government and the House, were it to accept the Government’s proposals, to dictate to local areas how that should be achieved. That is consistent with the approach taken. Where there are local referendums—we heard on Second Reading an excited dispatch from Shrewsbury in Shropshire—they are one of the factors to which we will have to have regard. The weight we give to any result will depend on other issues.

Patrick Hall: This clause places the onus of consultation on the Secretary of State, so would my hon. Friend elaborate a little on what form that consultation might take? He has just said, helpfully, that he also hopes that local councils will take the initiative to contribute in parallel to that process, but the Bill puts the onus on the Secretary of State. Will he settle that point for me?

Phil Woolas: The Bill provides, through the invitation procedure and the relevant criteria, for the council making the proposal to demonstrate that it has broad public support. How it does so is a matter for the council. That is one of the criteria that the Secretary of State must use to judge those proposals, but it is up to a council to decide whether to hold a referendum and the Secretary of State will take that into account. The weight given to any result in relation to such a proposal will depend on the views of surrounding areas when there are conflicting proposals and also on the question asked in any such referendum.
Local authorities have powers to run referendums under existing legislation—as part of a devolutionary approach from this Government—decide on the information available to the electorate and the arrangements for conducting the poll. It is up to councils to provide details of public support in their proposals. During the stakeholder consultation on the proposals, which we are preliminarily minded to implement, it will be open to anyone to make representations about them. Perhaps I can just explain what that means.
The intention is to consider the proposals that have been submitted, judge them against the criteria that have been outlined and consult more widely with interested parties, where there is a case against the criteria, between the end of March and the end of June 2007. Committee members should bear in mind two points. First, proposals in response to the invitation can only have come from local authorities by resolution of the council, which means that opposition council groups and other interested parties have not been allowed to advance a proposal. It is quite right and proper that they and many others should have their say. Secondly, the timetable that I have outlined deliberately coincides with the local election period, so that the public can have their say. To reassure the Committee of my good will in respect of that intention, I should say that, of the proposals that have been advanced, as any of us would have anticipated, some have cross-party support in some areas and conflicting support from the same parties at county and district level, on both sides, and from all parties in the House.
Our sensible approach reaffirms our commitment that this should be a bottom-up process. I emphasise that the Government’s policy is to say, on this and other matters, that it is up to councils to decide and justify their position and, as I mentioned before, to be accountable for those decisions.

Patrick Hall: This is an important point and I am grateful for the detail that my hon. Friend the Minister is providing. But, just to avoid doubt, let us deal with proposals that get over the first hurdle and are therefore considered in greater detail by the Government. Is he saying that the consultation mentioned in the clause, which must be carried out by the Secretary of State, is also expected to be complemented by action on the ground, at grass-roots level, by local councils that have made the bids that have got over the first hurdle?

Phil Woolas: We expect that the consultation with wider interested parties other than the local authority, which would include the interested parties that I mentioned, would either support or not support the criteria that were used to judge the original proposal. Putting it in crude terms, if a council made a unitary proposal that claimed to demonstrate widespread public support and a prima facie case, it would be incumbent on the Secretary of State to take into account any contrary consultation evidence submitted by interested parties from the local area. A wise local authority would want to take part in that consultation.

Robert Syms: As I understand it, local authorities have to make their case, as do the people in the area, and the case then goes before the Secretary of State, who decides who else to consult. I presume that, in order to obtain people’s views, it would be necessary to publish the case made by the local authority or by the group of local authorities. Are the details of bids going to be published? If not, how can people challenge the proposals, and argue and debate them? If they are not fully published, what will be published and what will not be? We need to know.

Phil Woolas: The hon. Gentleman makes a reasonable point. In practice, however, council proposals will have been put through the local authority’s decision-making procedures, and I have no reason to think that the relevant documents would be anything other than publicly available. I am trying to convey to the hon. Gentleman that I have not actually read the proposals yet, and the reason is that I have to maintain an objective stance on them.
We expect that local authorities will have consulted with local stakeholders before responding to the invitation to bid, and the judgment to be made will provide the proof of the pudding on that.

Alistair Burt: We have had incredibly little time on these matters. Given the date of publication of the White Paper and the deadline of 25 January for the submission of bids, what sort of serious consultation did the Minister expect local authorities to be able to make on such a significant decision?

Phil Woolas: It was for precisely that reason that meetings were held more than a year ago—meetings that the hon. Gentleman criticised in our earlier debate.

Alistair Burt: With respect, the Minister cannot get away with that. Those meetings involved councils, but they were not concerned with obtaining any sort of wide public support. That was not possible at the time he mentioned; it has had to happen since the publication of the White Paper.

Phil Woolas: The hon. Gentleman makes a good point on paper, but in practice it is not a real one.
 Dr. Blackman-Woods rose—

Phil Woolas: I give way to my hon. Friend, who has experience of this issue.

Roberta Blackman-Woods: Does my hon. Friend accept that local authorities such as Durham county council used the available time very efficiently and effectively, and consulted a range of stakeholders? That is reflected in the bid.

Phil Woolas: I make no comment on specific proposals, but the White Paper consultation process took some two years. The details of the invitation to propose were not known until the White Paper was published but, in many instances, local authorities had already considered the relevant issues. My central point, however, is that it is not for the Government to dictate the form of consultation, nor the evidence in relation to public support.

It being One o’clock,the Chairmanadjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Four o’clock.